Obama Stimulus Package Breakdown

[cobra de capell]

Some of this was Barney Frank, but most of it was just plain greed on the part of the lenders.

It's not that simply - the 'lender' was often not the entity that documented the loan - it was a mortgage broker with those people and companies completely separate from lenders and Fannie/Freddie - it's those people that cheated right and left - lied on documentation and encouraged potential house owners to lie - in the millions. Plus Barney has a lot more to do with it than you can even imagine - it was Barney and his pals that instructed Fannie/Freddie to be more lenient so that poor people could get into a house, in the millions. Fannie/Freddie turned around and packaged the loans, sold them to the market as A-1 paper and the market was sufficiently stupid (because huge bucks) to package and re-package the loans as derivatives that got so complicated that even the market could not understand them. The big banks bought the derivatives.

Actually, all these entities deserved to go down or to jail – just for being stupid. It's government involvement - relaxing lending standard to almost zero that started this mess - government needs to butt out but that's not what's happening even now.

As an aside, this whole thing is classic - huge numbers of people that think they are smarter than they actually are, buying stuff that they didn't even understand. Risk management went south - big time.